Mistakes happen, even when it comes to tax returns. But do you know which mistakes require amending your tax return?
In the midst of covering your day-to-day living expenses, it can be pretty hard to find the free funds to pay your entire tax debt in full. Unfortunately, failing to pay these taxes just makes things worse. The IRS will demand penalties, charge interest, garnish your wages, file a lien on your property, or even seize your property altogether if you don’t act fast. We’ve seen it time and time again, and it’s not pretty.
Tax-related identity theft is on the rise. Every year, thousands of Americans find themselves in an uphill battle with the IRS, trying to prove their identity and get the tax refunds they’re rightfully due. You see, your social security number is the key to everything in this country. If someone gets a hold of it, they can impersonate you, get a job under your name, or even file a tax return as you and claim a refund. In fact, according to the IRS, the agency identified more than 42,000 fraudulent tax returns and about $227 million in fraudulent refunds by March of last year.
Sometimes, people simply fall on hard times: paying rent, buying groceries, and keeping the lights on becomes not just difficult, but near impossible. The IRS can often make these trying times even harder: demanding back taxes, imposing fines, and giving you yet another expense that you just can’t afford at the moment. Fortunately, if you can get IRS CNC status, you could push back your deadline to pay by months, or even years.
Simply avoiding your tax debts and dodging the IRS isn’t the only option if you can’t pay your taxes. In fact, the IRS offers a few options that can reduce your debt, give you more time to pay it, or help you pay it off more feasibly. In some circumstances, you can even wipe your slate clean by paying a small fraction of the amount you owe.
There are few things worse than owing loads in back taxes—but finding out you owe them because of your former spouse’s mistakes? That takes the cake. Unfortunately, if you and your former spouse filed a joint tax return, you’re on the hook for whatever taxes are owed – and you’re both responsible for penalties if those taxes go unpaid. Luckily, there could be a way out. If certain factors apply to your situation, you may be eligible for innocent spouse tax relief, which takes the burden of your spouse’s tax mistakes off your shoulders.
In April of 2017, the IRS began using third-party collection agencies to assist in collecting overdue taxes from taxpayers. Here's what you need to know.